The IIFL Securities Report: Buy Cholamandalam In & Fin Co - February 04
IIFL Securities recommends a buy call on Cholamandalam Investment and Finance Company (Cholamandalam In & Fin Co) with a target price of Rs 1400, implying an upside potential of approximately 2.5%. The company's strong financial performance, including robust growth in its lending business, improved asset quality, and efficient cost management, support this positive outlook. Investors are advised to consider this opportunity for potential gains.
About Cholamandalam In & Fin Co:
Cholamandalam Investment and Finance Company Limited (CIFCL) is a non-banking financial company (NBFC) headquartered in Chennai, India. Incorporated in 1978, CIFCL offers a comprehensive range of financial services, including vehicle finance, two-wheeler loans, business loans, home loans, investment advisory services, and insurance. The company has a strong presence across India, with over 1,000 branches and 17,000+ employees. CIFCL is a part of the Murugappa Group, one of India's leading business conglomerates.
52 Week Price Trend:
Cholamandalam Investment and Finance Company (CHOLAFIN) currently trades at Rs 1365.55, falling within its 52-week range of Rs 1011.2 to Rs 1652. The stock has experienced volatility over the past year, reaching a high of Rs 1652 in March 2023 and a low of Rs 1011.2 in June 2022. Despite the recent decline from its peak, CHOLAFIN has consistently outperformed the broader market over the past year, indicating its resilience and growth potential.
Stratzy's MOST Analysis:
CHOLAFIN has been rated AA by Stratzy's MOST framework, indicating a medium level of fundamental risks. This rating is based on the company's strong management, positive outlook, financial safety, and favorable trend. CHOLAFIN is likely to be a relatively stable investment with a low risk of significant losses.
Company's Fundamentals:
Cholamandalam In & Fin Co (NSE: CHOLAFIN) stock indicators provide insights into its financial performance. The Price-to-Earnings (PE) ratio of 26.17 indicates that investors are willing to pay 26.17 times the company's annual earnings for its shares, suggesting the stock may be overvalued compared to its industry peers. The Price-to-Book (PB) ratio of 4.97 means the market value of CHOLAFIN is 4.97 times its book value, implying that investors are paying a premium for its assets. The Dividend Yield of 0.16% is relatively low, indicating that CHOLAFIN prioritizes reinvestment in growth over dividend distribution, which may appeal to long-term investors seeking capital appreciation.
Fundamental and Technical information provided in this blog were last updated on 04 Feb, 2025
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